COMMERCE 1BA3 Chapter Notes - Chapter 6: Book Value, Income Statement, Asset
16 Dec 2017
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Document Summary
This chapter opens with a discussion of the long-lived assets of canadian tire, a canadian company that has grown substantially over the last 90 years. The chapter identifies the types of tangible (property, plant, and equipment) and intangible assets, how to determine the cost of tangible assets, and how to distinguish a capital expenditure from an immediate expense. A detailed discussion of depreciation begins with an explanation of the concept of depreciation, including the items needed to measure depreciation. Three depreciation methods are illustrated and compared: straight-line, units-of-production (uop), and diminishing-balance (db). The mid- chapter summary problem allows the student to practise the different depreciation methods. The chapter covers partial-year depreciation and depreciation revision due to estimated useful life and/or residual value. This is followed by addressing fully depreciated assets and derecognition of assets. The text illustrates the disposal of assets that are junked or sold for a gain/(loss). Depreciation for tax versus accounting purposes is briefly discussed.
